Geothermal Incentives

Idaho Residential Alternative Energy Tax Deduction

The residential alternative energy tax deduction allows taxpayers an income tax deduction of 40% of the cost of geothermal devices used for heating.

This can be applied in the year that the energy system is installed. 20% can be deducted each year for an additional three years. The maximum deduction in any one year is $5,000.

The total maximum deduction is $20,000.

Idaho Power Incentive

$1000 for Idaho Power Customers for qualified heat pump installation

Federal Tax Credits

Energy property – Heat Pumps

Heat pumps that meet or exceed the CEE highest efficiency tier, not including any advanced tier, in effect at the beginning of the year when the property is installed qualify for a credit up to $2,000 per year. Costs may include labor for installation.

Qualified property includes new:

• Electric or natural gas heat pumps

Energy Efficient Home Improvement Credit

The amount of the credit you can take is a percentage of the total improvement expenses in the year of installation.

2023 through 2032: 30% or for heat pumps an annual maximum of $2,000, no lifetime limit

 Residential Clean Energy Credit

The Residential Clean Energy Credit equals 30% of the costs of new, qualified heat pumps that meet Energy Star requirements for your home installed anytime from 2022 through 2032.

Qualified expenses may include labor costs for onsite preparation, assembly or original installation of the property and for piping or wiring to connect it to the home.